EXHIBIT 10.14
REAL ESTATE LIEN NOTE
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SECOND LIEN
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DATE: December 1, 1993
MAKER: SUMMIT CARE-TEXAS NO. 3, INC. A TEXAS CORPORATION
MAKERS' MAILING ADDRESS 2600 W. MAGNOLIA BLVD.
BURBANK, CA 91505
PAYEE: WOODLANDS PLACE NURSING CENTER, INC.
PLACE FOR PAYMENT 709 N. SAN JACINTO
CONROE, TX 77301
PRINCIPAL AMOUNT: TWO MILLION FIVE HUNDRED SEVENTY ONE THOUSAND TWO HUNDRED
SIXTY SIX AND 62/100 DOLLARS ($2,571,266.62)
ANNUAL INTEREST RATE ON UNPAID PRINCIPAL FROM DATE:
NO INTEREST IS CHARGED ON NON-DEFAULT PAYMENTS
ANNUAL INTEREST RATE ON MATURED, UNPAID AMOUNTS OR ON DEFAULT: SEVEN PERCENT
(7%)
TERMS OF PAYMENT (PRINCIPAL ONLY):
Principal shall be paid in regular monthly payments and one final payment
according to the following schedule:
a. No payments shall be due from December 1, 1993 through December 31,
1994.
b. Principal is payable in monthly installments of One thousand five
hundred and no/100 dollars ($1,500.00) beginning January 1, 1995 and
continuing monthly thereafter for eleven (11) consecutive months with
the last installment due on December 1, 1995: then
c. Principal is payable in monthly installments of three thousand five
hundred fifty and no/100 dollars ($3,550.00) beginning January 1, 1996
and continuing monthly thereafter for eleven (11) consecutive months
with the last installment due on December 1, 1996: then
d. Principal is payable in monthly installments of five thousand fifty
and no/100 dollars ($5,050.00) beginning January 1, 1997 and
continuing monthly thereafter for eleven (11) consecutive months with
the last installment due on December 1, 1997: then
e. Principal is payable in monthly installments of five thousand fifty
and no/100 dollars ($5,050.00) beginning January 1, 1998 and
continuing monthly thereafter for eleven (11) consecutive months with
the last installment due on December 1, 1998: then
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f. Principal is payable in monthly installments of eight thousand fifty
and no/100 dollars ($8,050.00) beginning January 1, 1999 and
continuing monthly thereafter for eleven (11) consecutive months with
the last installment due on December 1, 1999: then
g. Principal is payable in monthly installments of thirteen thousand
fifty and no/100 dollars ($13,050.00) beginning January 1, 2000 and
continuing monthly thereafter for eleven (11) consecutive months with
the last installment due on December 1, 2000: then
h. Principal is payable in monthly installments of sixteen thousand fifty
and no/100 dollars ($16,050.00) beginning January 1, 2001 and
continuing monthly thereafter for eleven (11) consecutive months with
the last installment due on December 1, 2001: then
i. Principal is payable in monthly installments of sixteen thousand fifty
and no/100 dollars ($16,050.00 beginning January 1, 2002 and
continuing monthly thereafter for eleven (11) consecutive months with
the last installment due on December 1, 2002: then
j. Principal is payable in monthly installments of nineteen thousand
fifty and no/100 dollars ($19,050.00 beginning January 1, 2003 and
continuing monthly thereafter for eleven (11) consecutive months with
the last installment due on December 1, 2003: then
k. A final payment of remaining principal and interest, if any, is due
December 1, 2003.
SECURITY FOR PAYMENT: This note is secured by a vendor's lien and superior
title retained in a deed from WOODLANDS PLACE NURSING CENTER, INC. to SUMMIT
CARE-TEXAS NO. 3. INC., A TEXAS CORPORATION. Maker dated of even date herewith
and by a deed of trust with security agreement of even date from Maker to Rodney
Tow, Trustee, all of which cover the following described real property and
chattels located thereon:
SEE EXHIBIT "A"
INFERIOR TO PRIOR LIENS: This note and the documents securing it are secondary
inferior and subject to the following liens and encumbrances:
1. The renewed, modified and extended real estate lien note in the
original principal amount of $5,458,048.28, deed of trust and security agreement
between the Woodlands Place Nursing Center, Inc. and the Secretary of Housing
and Urban Development of even date herewith. Said renewed, modified and
extended real estate lien note, deed of trust and security agreement are an
extension, renewal and modification of the following:
A. Deed of Trust dated March 6, 1985, recorded under File No. 8509454 of
the Official Public Records of Real Property of Montgomery County,
Texas, executed by Woodlands Place Nursing Center, Inc. in favor of
Dale H. Andreas, Trustee, securing the payment of one note in the
principal amount of $4,762,200.00 bearing interest and
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payable as therein provided to the order of Mitchell Mortgage Company.
Said note and lien securing same being additionally secured by that
certain Agreement dated March 6, 1985, executed by Woodlands Place
Nursing Center, Inc. and the Secretary of Housing and Urban
Development, recorded under File No. 8509455 of the Official Public
Records of Real Property and by those certain Financing Statements
recorded under File Nos. 8509456 and 9030955 of the Official Public
Records of Real Property of said County.
Said note and lien securing same having been subsequently assigned to
the Secretary of Housing and Urban Development by instrument recorded
under File No. 9259715 and 9259716 of the Official Public Records of
Real Property of Montgomery County.
B. Deed of Trust dated January 19, 1989, recorded under File No. 8903245
of the Official Public Records of Real Property of Montgomery County,
Texas, executed by Woodlands Place Nursing Center, Inc. in favor of
Dale H. Andreas, Trustee, securing the payment of one note in the
principal amount of $768,000.00, bearing interest and payable as
therein provided to the order of Mitchell Mortgage Company.
Said lien has been subsequently assigned to the Secretary of Housing
and Urban Development by instrument dated November 20, 1992 and
recorded under File No. 9259131 of the official Public Records of Real
Property of Montgomery County.
2. The Deed of Trust to Secure Assumption of even date herewith from
Maker to Rodney Tow, Trustee covering the property described in Exhibit "A".
As long as the Secretary of Housing and Urban Development, or his successor
or assigns, is the insurer or holder of the first lien on the property described
herein, any payments due from project income under this Note shall be payable
only from surplus cash of the said project, as that term is defined in the
Regulatory Agreement of even date herewith, between the Secretary of Housing and
Urban Development and Woodlands Place Nursing Center, Inc. The restriction on
payment imposed by this paragraph shall not excuse any default caused by the
failure of the maker to pay the indebtedness evidenced by this Note.
Maker promises to pay to the order of Payee at the place for payment and
according to the terms of payment the principal amount plus interest at the
rates stated above. All unpaid amounts shall be due by the final scheduled
payment date.
On default in the payment of this note or in the performance of any
obligation in any instrument securing or collateral to it, or in the payment of
the renewed, modified and extended real estate lien note in the original
principal amount of $5,458,048.28 or any instrument securing or collateral to
such note, the unpaid principal balance and earned interest on this note shall
become immediately due at the election of Payee. Except as herein provided,
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Maker and each surety, endorser, and guarantor waiver all demands for payment,
presentations for payment, notices of intention to accelerate maturity, notices
of acceleration of maturity, protests, and notices of protest. Notwithstanding
the foregoing, Payee agrees to give Maker ten (10) days prior written notice of
any default under the Note or the $5,458,048.28 Note, or any instrument securing
collateral to either of such notes, (during which ten (10) days Maker shall have
the right to cure such default), before Maker will exercise any remedy as a
result of such default.
If this note or any instrument securing or collateral to it is given to an
attorney for collection or enforcement, or if suit is brought for collection or
enforcement, or if it is collected or enforced through probate, bankruptcy, or
other judicial proceedings, then Maker shall pay Payee all costs of collection
and enforcement, including reasonable attorney's fees and court costs, in
addition to other amounts due. Reasonable attorney's fees shall be 10% of all
amounts due unless either party pleads otherwise.
Interest on the debt evidenced by this note shall not exceed the maximum
amount of nonusurious interest that may be contracted for, taken, reserved,
charged, or received under law: any interest in excess of that maximum amount
shall be credited on the principal of the debt of, of that has been paid,
refunded. On any acceleration or required or permitted prepayment, any such
excess shall be canceled automatically as of the acceleration or prepayment or,
if already paid, credited on the principal of the debt or, if the principal of
the debt has been paid, refunded. This provision overrides other provisions on
this and all other instruments concerning the debt.
Each Maker is responsible for all obligations represented by this note.
When the context requires, singular nouns and pronouns include the plural.
Notwithstanding anything contained herein on the contrary, all obligations
of Maker contained herein are subject to Maker's right of offset granted under a
certain Agreement of Purchase and Sale of Assets entered into between Woodlands
Place Nursing Center, Inc. and Summit Care-Texas No. 3, Inc. as of November 6,
1993 (the "Agreement"), the terms of which are incorporated by reference herein
as if set forth verbatim herein. In the event that any right of offset arises
such amount shall be applied to the next installment due under this note and any
excess shall be applied to subsequent installments until the amount of such
offset is totally applied. Notwithstanding anything contained herein to the
contrary, the exercise of any right of offset in good faith by Maker shall not
constitute a default under this Note. In the event that a right of offset
arises the amount of such offset shall bear interest at the rate of ten percent
(10%) per annum until it is applied against an installment under this Note and
until such offset is ultimately totally applied.
SUMMIT CARE-TEXAS NO. 3, INC.
/s/ Derwin Williams
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By: Derwin Williams
Vice President/Chief Financial Officer
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